Just as it sounds. When fecial matter is compounded in between your cheaks. Word created and then made popular by Dave Chappell doing a skit on his show about the side effects of "Ribs", a sleeping aid for black people.

The feeling of moist, itchy, clay-like fecal matter which remains in your anal cavity after sub-par wiping is the result of one having an extremely messy bowel movement and spending four to six hours perfroming physical activity in moderate to extreme heat. The aforementioned condition may or may not result in the dragging of ones bare anus on a coarse surface such as a carpet or snadpaper.

Jesus Christ, I took a massive shit before helping you move and spent my day scratching my mud butt.

-adjective
To possess ample enough diarrhea within one's body wherein it becomes humanly impossible to contain. After such an event, said "mud" escapes from the body usually attacking the underwear first, then outerwear...

Man, my girlfriend and I went to that all you can eat spicy taco night. I had mud butt so bad I had to throw my underwear away.